TRANSPORT group Stagecoach has hit out at rival National Express after the long-distance coach operator snubbed its takeover approach.

Stagecoach said it was disappointed at the rejection of its all-share offer, which would have given National Express a 40 per cent stake in the enlarged group worth £1.7billion.

Stagecoach said National Express, which has pledged a fund-raising to cut its £1billion debt, would miss out on benefits of a tie-up including a chance to repair relations with the Government, damaged when National Express pulled out of its loss-making East Coast rail franchise.

“There was a compelling strategic and financial proposition for a combination,” Stagecoach said.

National Express, which had been the subject of a £765million approach by a consortium including its biggest investor, Spain’s Cosmen family, said the Stagecoach proposal would delay action that it needs this year to shore up its finances.

“It is unlikely a combination with Stagecoach could be successfully ­executed in 2009,” it said.

Stagecoach, headed by chief executive Brian Souter, runs buses across the UK, and the South West Trains and East Midlands Trains rail franchises.

National Express, whose chairman is John Devaney, runs long-distance coaches, local bus services and the East Anglia and C2C train franchises, as well as the East Coast contract.

National Express plans an update on its fund-raising plans in November.

Two rivals to Stagecoach and National Express have revealed solid trading in bus and rail operations.